Tag Archives: California Governor Gavin Newsom

Governor Newsom Convenes Special Session to Hold Oil Industry Accountable for Price Gouging

Valero’s $2.82 billion in profits were 500% higher than the year before.

Newsroom, Office of Governor Gavin Newsom, Nov 30, 2022

SACRAMENTO – As oil companies continue to evade questions about unexplained gas price increases, Governor Gavin Newsom today convened a special session of the California Legislature on December 5 to pass a price gouging penalty on oil companies that will keep money in Californians’ pockets.

The Governor’s action comes on the heels of a state hearing  yesterday – which five major oil refiners refused to attend – to investigate this fall’s unprecedented spike in gasoline prices. This spike in gasoline prices resulted in record refiner profits of $63 billion in just 90 days, disproportionately affecting low- and middle-income families.

“Big oil is ripping Californians off, and the deafening silence from the industry yesterday is the latest proof that a price gouging penalty is needed to hold them accountable for profiteering at the expense of California families,” said Governor Newsom. “I’m calling a special session of the Legislature to do just that, and to increase transparency on pricing and protect Californians from outrageous price spikes in the future.”

Governor Newsom signs proclamation convening a special session to pass price gouging penalty on oil companies

This fall’s spike occurred while crude oil prices dropped, state taxes and fees remained unchanged and gas prices did not increase outside the western U.S., so the high prices went straight to the industry’s bottom line.

The text of the Governor’s proclamation convening a special session can be found here.

During the special session, the Legislature will also consider efforts to empower state agencies to more closely review gas costs, profits and pricing as well provide the state with greater regulatory oversight of the refining, distribution and retailing segments of the gasoline market in California.

Taking action to lower prices at the pump, Governor Newsom in September ordered the switch to winter-blend gasoline and demanded accountability from oil companies and refiners that do business in California. Since California’s record-high gas prices of $6.42, the Governor’s actions have reduced those prices to $4.95 most recently – a decrease of $1.47 since the peak.

In the third quarter of 2022, from July to September, oil companies reported record high profits:

# # #

Valero Quintuples 3rd Quarter Profits: Makes Windfall Of $50 million Off California Consumers

60 cents per gallon profit – “These profits show Governor Newsom is justified in his call for a special session to mandate a price gouging refund.”

Consumer Watchdog, By Liza Tucker, October 25, 2022

Los Angeles, CA—Valero’s net income hit $2.8 billion for the third quarter of 2022, more than quintupling the $463 million reported for the same quarter last year.

Valero’s Western region profits, which are strictly from its California refineries, topped 60 cents per gallon. That is only the second time it has reported such a windfall of over 50 cents per gallon since 2001. The first time was the second quarter of 2022 when its California profits were 83 cents per gallon. Valero’s California profits were once again higher than any of its other regions in the country and the world.

“These windfall profits must be returned to California drivers if the oil refiners are to treat Californians like customers rather than ATMs,” said Jamie Court, president of Consumer Watchdog. “These profits show Governor Newsom is justified in his call for a special session to mandate a price gouging refund.”

In California, the Valero profits translate into an estimated quarterly windfall profit of $50.8 million that should go back to consumers, Consumer Watchdog said today, calculating all monies made over 50 cents per gallon as a windfall profit.

In the second quarter, Valero’s windfall profits made on margins of 83 cents per gallon was $161,700,000. Adding to Valero’s windfall profit from last quarter, Valero would need to refund $211 million in windfall profit back to California consumers if a price gouging refund law were in effect.

Governor Newsom has called a special legislative session in December to consider a windfall profits cap and price gouging rebate for California consumers.  Consumer Watchdog estimates that the amount of windfall profits to be returned to consumers by refiners reported so far this year is now over $1 billion. See the calculation.  

The formula used to calculate windfall profits is every dollar in profit made above 50 cents per gallon, which the company has only reported twice since 2001 — in the second and third quarters of 2022. View the chart of per gallon West Coast profits since 2001.

None of the four California oil refiners who reported windfall profits in the second quarter of 2022 had previously made more than 50 cents per gallon annually in all their years doing business in California. Chevron’s profits only exceeded 50 cents per gallon three times in the last twenty years.

Three other California refiners—PBF Energy, Phillips 66 and Marathon Oil—will be reporting third quarter profits in the coming two weeks. Chevron, which serves one third of the California market, only reports margins annually.

Valero’s haul of 60 cents per gallon off its California refineries is more than it has made at any other point in the last 20 years except for last quarter. Cents per gallon are calculated by dividing the gross refining margins on a barrel of crude by 42—the number of gallons in a barrel. Gross refining margins reflect the difference between the cost of crude oil bought and the price of petroleum products produced and sold by the refiner.

Oil refiners’ reports to investors only reveal Western regional margins, not California specific profits, which are generally higher.   Two of the five oil refiners, Valero and PBF, have their Western refineries in California only.

In the third quarter, Valero’s California refineries more than doubled margins per barrel to $25.36 from $11.29 in the same quarter last year. For the nine months, West Coast margins were $25.89 over $9.81 year before.  The margins were the highest reported among Valero’s four regions of operation, including the U.S. Gulf Coast, North Atlantic and U.S. Mid Continent.

A new law, SB 1322 (Allen), backed by Consumer Watchdog, will require oil refiners to post their profits per gallon from refining monthly beginning in January.  This will give California the basis to monitor for price gouging in real time and, if a price gouging rebate is enacted, to give the excess profits back to drivers.

On Valero’s earnings call with investors today, its Chief Executive Officer Joe Gorder noted that refining margins “remain supported” by strong product demand and low product inventory. Despite high output, Gorder said that global supplies remained “constrained” due to refineries being taken offline, “unfavorable economics,” and switching refineries away to producing low carbon fuels.

Newsom calls for more aggressive climate action

Oak Fire forecast for July 28 2022

CalMatters, by Emily Hoeven, July 25, 2022

As the largest wildfire of the year rages across California, Gov. Gavin Newsom is doubling down on an aggressive strategy to combat climate change — one that also appears to involve boosting his national profile.

Newsom on Saturday proclaimed a state of emergency in Mariposa County due to the Oak Fire near Yosemite National Park, which since igniting on Friday has burned through more than 15,600 acres of bone-dry fuel and was 0% contained as of Sunday night, according to Cal Fire.

California has secured federal support to help defray the costs of battling the blaze, which as of Sunday was being attacked by nearly 2,100 firefighters. More than 6,000 people were under evacuation orders, nearly 3,000 PG&E customers were facing power outages and 15 structures had been destroyed or damaged with thousands more threatened.

  • The Oak Fire marks the end of California’s relatively calm start to the fire season: Fewer than 34,000 acres burned statewide from Jan. 1 to July 19, the lowest total during that time period since 2009, according to a Mercury News analysis.
  • Isaac Sanchez, a Cal Fire battalion chief“People shouldn’t get complacent. If this was a baseball game, we are in the middle innings. There are still a lot of dry months to come.”

Newsom alluded to complacency at the national level in a Saturday letter to President Joe Biden, in which he slammed “uncooperative Republicans and a lone Democrat from a coal-producing state” (West Virginia Sen. Joe Manchin) for holding “hostage” parts of Biden’s climate agenda.

  • Newsom added: “We want to reiterate our commitment to … finding new ways to work around those Senators who chose to keep their head in the sand instead of confronting the crisis we are all facing together. Partnering with California and other leading states and cities is now essential.”

As a proof point of what Newsom described as California’s world-leading action on climate, he cited a blueprint — released just the day before — to make the state’s ambitious climate plans even more aggressive. Continue reading Newsom calls for more aggressive climate action

Gavin Newsom’s plan to save the US Constitution by trolling the Supreme Court

A new California gun law should force the Supreme Court to confront the enormity of its worst decision in decades.

VOX, By Ian Millhiser Jul 25, 2022

California Gov. Gavin Newsom speaks during a news conference where he signed SB 1327 into law, in Los Angeles on July 22. David McNew/Getty Images

California Gov. Gavin Newsom (D) signed a law on Friday modeled after Texas’s anti-abortion law SB 8 — the Texas law which uses private lawsuits to target abortion providers. But there’s one important difference between the two state laws: California’s new law sends these litigious bounty hunters against gun dealers who sell certain guns, including assault weapons and weapons with no serial number.

It’s a high-stakes gambit that will test whether the Supreme Court actually meant what it said in Whole Woman’s Health v. Jackson (2021), which held that because of SB 8’s unique style of enforcement, it was immune from meaningful judicial review — and thus would take effect despite very strong arguments that the law was unconstitutional at the time.

Shortly after Jackson was decided last December, Newsom announced that he disagrees with the Supreme Court’s conclusion that states can dodge judicial review of unconstitutional laws. But Newsom also said that, if the Court’s Republican-appointed majority would give this power to states, then he would use it to limit access to firearms.

Indeed, California’s new gun law, known as SB 1327, is explicit that the new law’s fate is tied to SB 8’s. SB 1327 provides that its SB 8-like provisions “shall become inoperative” if SB 8 is struck down “in its entirety by a final decision of the United States Supreme Court or Texas Supreme Court.”

The state of California, in other words, appears to be trolling the Supreme Court. SB 1327 should force the justices to either overrule Jackson and admit that they were wrong to let states evade the Constitution, or give California’s new gun ban the same immunity from judicial scrutiny that five justices gave SB 8.

That is, of course, assuming that this increasingly political Supreme Court cares about consistency. Continue reading Gavin Newsom’s plan to save the US Constitution by trolling the Supreme Court